Written by When it comes to business agreements, one commonly used term is the Share Premium Agreement (SPA). This legal document outlines the terms and conditions of the issuance of new shares in a company, including the terms for the payment of a share premium by the shareholders.
In Germany, this document is called the “Share Premium Agreement Deutsch” or “Kapitalerhöhung mit Agio”. The SPA is used by German companies to raise capital by issuing new shares to existing shareholders or to new investors. The terms of the SPA can be negotiated between the company and investors, but typically include the amount of the share premium, the payment terms, and any restrictions on the transfer of the newly issued shares.
The share premium is the amount paid by investors for the newly issued shares above their nominal value. The share premium is important as it allows companies to raise additional capital without diluting the ownership percentage of current shareholders. The share premium is typically used to fund specific projects or investments, such as research and development, new product launches, or infrastructure improvements.
The SPA also outlines the rights of the new shareholders, including their voting rights, dividend rights, and rights in case of liquidation or bankruptcy. The SPA also contains representations and warranties by the company to investors, regarding the accuracy and completeness of its financial statements, ownership of assets, and compliance with legal and regulatory requirements.
It is important for companies to ensure that their SPA is properly structured and drafted in order to avoid disputes or legal challenges in the future. Engaging the services of an experienced legal professional is highly recommended to ensure that the SPA is legally enforceable and protects the interests of all parties involved.
In conclusion, the Share Premium Agreement Deutsch or Kapitalerhöhung mit Agio is an important legal document for German companies looking to raise capital by issuing new shares. It outlines the terms and conditions of the issuance of new shares, including the payment of a share premium and the rights of new shareholders. Companies should ensure that their SPA is properly structured and drafted with the assistance of an experienced legal professional.